Sunday, 24 February 2013

Institutionalize "Governance, Risk management and Compliance"

Assessing the various parameters of risk
is crucial for any business. Business risk assessment will bring in to play all
those factors that can potentially damage and harm your organizational structure
and functioning. In order for a business’s risk management function to remain
in sync with all that is happening, an efficient risk management program
becomes extremely necessary.

The
risk assessment matrix

The various factors that can hit a company’s
normal functioning include operational risk, location risk, financial and human
risk. These factors need to be constantly monitored so that any sign of trouble
can be dealt with. For example, operational risk management may take into
consideration, factors such as glitches in production, the dissatisfaction of
clients and any problems related to the brand’s reputation. Similarly financial
risk management will include factors such as risks related to pricing and
maintenance of assets. This risk assessment matrix helps a business in
constantly monitoring factors that might cause potential problems to the smooth
running of business. Finally, they also help in identifying problems early and
solving them before the risks can lead to potential loss.

Identifying
the risks in your business

Your risk management framework should be
able to properly identify the potential threat of various risks to your type of
business. For example, if you are a restaurant, then the biggest risk that you
face is from the quality of your raw ingredients. Your operation risk will
include your servicing and culinary skills and in the same vein your human risks
will include the management of your staff and their behavior. Although the
broad aspects of business risk management remain the same for most businesses,
their characteristics change with the type of business that they are applied
to. You need to be able to identify project risks in order to ensure the smooth
functioning of your organization.

Eliminating
risks from the business

Timely business risk analysis will mean
your business will remain safeguarded against possible problems. In case, there
is a problem, ensure that the risk management methods that you employ are based
on sound prioritization of the level of the risk. You of course need to take care of the
bigger risks before delving into the problems created by smaller risks.
Insurance plays a key role in averting risks. Make sure that business is
insured in such a way that valid compensation is available to you in case of
any eventuality.

1 comment:

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